The lender also increased its benchmark lending rate by the same margin which would mean the existing borrowers also have to pay more for their loans.
The rate hike would be effective from April 25, 2011, the state-run bank said in a statement.
After today`s rise, State Bank of India`s (SBI) base rate goes up to 8.50 per cent from 8.25 per cent.
SBI`s base rate, below which it cannot lend, is still lower than public sector banks` which have set their base rates at around 9 per cent.
The base rate of India`s largest private sector lender ICICI Bank is 8.75 per cent.
To bring in more transparency, the base rate was introduced replacing the Benchmark Prime Lending Rate (BPLR) in July , last year.
SBI benchmark prime lending rate by 25 basis points to 13.25 per cent. This will make EMIs for the existing loans dearer by at least 25 basis points.
The BPLR is used for determining interest rates on loans and advances sanctioned up to June 30, 2010.